INDGN - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 3.3
| Stock Code | INDGN | Market Cap | 11,529 Cr. | Current Price | 479 ₹ | High / Low | 640 ₹ |
| Stock P/E | 59.4 | Book Value | 81.6 ₹ | Dividend Yield | 0.42 % | ROCE | 16.6 % |
| ROE | 12.6 % | Face Value | 2.00 ₹ | DMA 50 | 507 ₹ | DMA 200 | 544 ₹ |
| Chg in FII Hold | 0.18 % | Chg in DII Hold | 1.11 % | PAT Qtr | 34.8 Cr. | PAT Prev Qtr | 59.9 Cr. |
| RSI | 41.2 | MACD | -9.07 | Volume | 2,94,964 | Avg Vol 1Wk | 3,75,030 |
| Low price | 456 ₹ | High price | 640 ₹ | PEG Ratio | 5.70 | Debt to equity | 0.03 |
| 52w Index | 12.8 % | Qtr Profit Var | -30.3 % | EPS | 8.08 ₹ | Industry PE | 78.8 |
📊 INDGN shows moderate fundamentals with cautionary signals for long-term investment. ROCE at 16.6% and ROE at 12.6% reflect decent efficiency and profitability. Debt-to-equity at 0.03 indicates a virtually debt-free balance sheet, which is a strong positive. However, the PEG ratio of 5.70 and P/E of 59.4 (though below industry PE of 78.8) suggest overvaluation relative to growth. Current price (479 ₹) is below both DMA 50 (507 ₹) and DMA 200 (544 ₹), showing weak momentum. RSI at 41.2 indicates near oversold conditions, while quarterly PAT dropped sharply (-30.3%), raising concerns.
💡 Ideal Entry Zone: 460 ₹ – 480 ₹ (aligned with support levels and oversold RSI).
📈 Exit / Holding Strategy: If already holding, maintain for 2–3 years provided ROE sustains above 12% and earnings growth stabilizes. Consider partial profit booking near 600–620 ₹ resistance. Long-term holding should be cautious given high PEG ratio and earnings volatility.
Positive
- 📌 ROCE at 16.6% and ROE at 12.6% show decent efficiency.
- 📌 Debt-to-equity ratio of 0.03 highlights a debt-free balance sheet.
- 📌 EPS at 8.08 ₹ supports earnings visibility.
- 📌 Institutional support with FII (+0.18%) and DII (+1.11%) inflows.
Limitation
- ⚠️ PEG ratio of 5.70 indicates overvaluation relative to growth.
- ⚠️ P/E of 59.4 is high despite being below industry PE.
- ⚠️ Dividend yield at 0.42% is negligible.
- ⚠️ Current price below DMA 50 and DMA 200 shows weak momentum.
Company Negative News
- ❌ Quarterly PAT dropped from 59.9 Cr. to 34.8 Cr. (-30.3%).
- ❌ Weak technical indicators (MACD -9.07, RSI near oversold).
Company Positive News
- ✅ Institutional investors increased holdings (FII and DII).
- ✅ Debt-free structure strengthens financial stability.
Industry
- 🏭 Industry PE at 78.8 vs stock PE 59.4 shows relative valuation comfort.
- 🏭 Sector growth supported by consumer demand and premium product positioning.
Conclusion
🔎 INDGN offers decent ROE/ROCE and a debt-free balance sheet, but high PEG ratio and earnings volatility limit long-term attractiveness. Best suited for cautious investors who can accumulate near 460–480 ₹ and hold for 2–3 years, while monitoring profitability trends. Profit booking near 600–620 ₹ resistance is advisable.